The U.S. Department of Energy suggested that it may raise its 2005 projection for oil demand. The suggestion caused rise in crude futures Thursday.
Mid-afternoon in Singapore, benchmark light, sweet crude for September delivery climbed 33 cents to US$59.44 a barrel in Asian trading hours. It had fallen 9 cents to close at US$59.11 in New York.
Other Nymex products followed crude's lead. Heating oil was up more than half a cent to US$1.6230 a gallon while gasoline was up to US$1.7170 a gallon.
In London, the September contract for Brent crude on the International Petroleum Exchange edged 28 cents higher to US$58.29 a barrel.
Oil prices are about 40 percent higher from a year ago.
The U.S. weekly inventories data, released Wednesday, showed a decline in domestic inventories of crude oil last week but an increase in the supply of distillate fuel, which includes heating oil and diesel. But the weekly report showed a somewhat larger-than-expected drop in the nation's commercial supply of gasoline.
The Department of Energy's statistical office, the Energy Information Administration, said Wednesday it revised upward its total demand figures for last year and said it could do the same for this year as well, reports the AP.
"Revisions are the norm," the EIA said, adding that "higher final 2005 numbers are likely."
That seems to run counter to recent projections by the Paris-based International Energy Agency and the Organization of Petroleum Exporting Countries, which have slashed forecasts for world oil demand growth, citing weaker-than-expected consumption in China that sent prices downward.
The midweek data snapshot showed crude oil stocks fell by 2.3 million barrels to 317.8 million barrels, or 7 percent above year ago levels. Gasoline inventories declined by 2.1 million barrels to 209.2 million barrels or about 1 percent below year ago levels.
As expected, the supply of distillates, which group heating oil, jet fuel and diesel, grew by 3.1 million barrels to 125.8 million barrels, or 5 percent higher than last year.
The market has been trying to assess the impact of China's decision late last week to cut its currency link to the U.S. dollar and instead to weigh it against a basket of currencies. Some analysts believe the move could spur demand because imported crude will be cheaper in yuan terms, while others say it could dent China's economic growth and slow its rising appetite for crude.
China is the world's second largest consumer of crude behind the United States.
Indeed, how dare they run US-independent policy? They should have followed the example of the European Union that turned independent states of the Old World into US-ditto entities